Question

Pine Street Inc. makes unfinished bookcases that it sells for $58.09. Production costs are $37.97 variable and $10.12 fixed. Because it has unused capacity, Pine Street is considering finishing the bookcases and selling them for $73.08. Variable finishing costs are expected to be $6.64 per unit with no increase in fixed costs. Prepare an analysis on a per unit basis showing whether Pine Street should sell unfinished or finished bookcases. (Round answers to 2 decimal places, e.g. 15.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Answer 1

Answer:

Check the table in the explanation

Explanation:

Differential analysis

                               Sell            Process             Net income                                                     unfinished       further         increase  (decrease)

Sale price per unit    58.09          73.08                 14.99

Cost per unit    

variable                      37.97           44.61                 -6.64

Fixed                          10.12            10.12                     0

total                            48.09           54.73                8.35

Net income per unit      10            18.35                  8.35

The book cases should be sold after processed further